Yesterday, a federal judge in Connecticut denied Fresh Market’s Motion for Summary Judgment (a kind of motion to dismiss a case) and has allowed the plaintiff Department Managers to continue seeking unpaid overtime in court. In this case, the Department Managers (represented by the Hayber, McKenna & Dinsmore) were paid a type of “half time overtime” called the Fluctuating Work Week (“FWW”). The Department Heads were paid a weekly salary plus overtime, but the overtime was calculated based on a work week longer than 40 hours. By this method (sometimes referred to by the inappropriate “Chinese Overtime” nickname), the more hours an employee works, the lower his or her overtime rate becomes. The case is called Ouellette v. Fresh Market, Inc., case number 3:13-cv-01027-AWT.
Because this method of calculating overtime decreases the amount of money an overtime-eligible employee receives, there are strict rules for how this method may be used. In this case, Mr. Ouellette and the other Department Heads who have joined the case claim that the fact that they were paid certain bonuses means that Fresh Market was not entitled to compute overtime in this manner. This may sound counter-intuitive- why would an employee complain about being paid a bonus? In the context of the fluctuating work week, the employer can’t use bonuses based on the number of hours the employee works because it violates one important rule of the FWW; i.e., that employees receive a fixed salary each week. When an employee receives a bonus, he’s no longer receiving a fixed weekly salary.
The reason employees object to these hours-based bonuses is that the FWW is a weaselly way around the FLSA’s mandate to pay employees time and one half in the first place. It’s important that employers who seek to take advantage of the rules allowing for use of the FWW are held to each and every rule governing its use- including the rule that employees be paid a fixed weekly salary. This ruling is consistent with other Connecticut cases restricting the use of the FWW.
Congratulations to Hayber, McKenna & Dinsmore team for this win!